Dividend Payouts, Apple (AAPL) Worries and Automatic Investment Plans

April has been mostly good for our portfolio.  

We got paid dividends twice in April.  First, Altria (MO) paid me $4.23 in dividends on April 9, 2012.  With my Dividend Reinvestment Plan, I was able to purchase 0.1358 shares of MO at $31.15.

Second, Kraft (KFT) paid me $3.36 in dividends on April 15, 2012.  Again, my Dividend Reinvestment Plan bought me 0.0900 shares of KFT at $37.33.

This may seem peanuts to the untrained eye but that's $7.59 of free money.  Plus, I got more shares of a company which can increase in value over time.  Besides, $7.59 will not pay my bills so it might as well work harder for us in the stock market.

On top of that, WM, MO and LULU have been pulling their weight with the appreciation of our portfolio.  Apple still owns the bulk of our growth but the Cupertino company has been beaten up these past few days.  Rumors of supply issues and that mobile carriers were sick of Apple plagued the stock price which  dropped to $560 from an all-time high of $644 (04/10/2012).  I'm not worried.  It's just some profit taking and rumor-mongering (although that patent infringement judgement against them can be an issue).

Now, I have some cash to spend and I'm looking to buy more shares to add in our portfolio.  

Currently, I'm looking at Xilinx Inc (XLNX) and Waste Management (WM).

XLNX looks tempting because of it's upcoming Ex-Dividend date (May 14, 2012 with a dividend date of June 5, 2012).  I also expect XLNX to increase their net profits due to the upcoming technology purchases by consumers (back to school/college CPU purchases for example) in the near future.  Intel has also launched their IVY Bridge chips which would spur a new line of products that would come from Xilinx and it's competitors.

However, the trend of XLNX and the possible competitive arms-race may not bode well for my stock position.  Also, Wall Street's estimates does not give me confidence either.  In addition, if I buy more XLNX, my asset allocation would be heavy on Tech ahead of the summer Tech Sector slow down.  Furthermore, the PEG ratio of 4.89 would suggest XLNX would be an expensive stock to buy (AAPL is at 0.66 - my cheapest stock purchase).

Given my concerns and with Analysts' HOLD recommendation, I would seriously reconsider my plan of buying more XLNX.

On the other hand, WM has been showing better news than XLNX.

WM has seen profits grow at the average of 1.2% year-over-year.  WM has managed to capture the methane gas from their landfills and transformed it into energy for their trucks and possibly households.  Also, WM has E-Waste recycling services contracts with electronic companies such as Sony.  I've been an environmentalist even before being "Green" became cool and this news caught my attention and made me feel better with my investment. Besides, worse case scenario, people would still need WM to get rid our their trash... a sustainable business if you ask me.  Furthermore, I'm a bit underweight with my WM position (Business Services Sector at 5.83%) at $187.99 (4.6% of total portfolio).

So perhaps, I'll use the $525.00 dollars I have in cash to buy some WM...  or perhaps split it with some Energy Transfer Partners ETP as part of my Natural Gas/Greener Fuel play.

All right, I have decided:

ETP = $200 - $4 fee = $196/$47.72 as of 04/24/12 1:15pm = 4.1072 shares

WM = $225 - $4 fee = $221/$35.98 as of 04/24/12 1:15pm = 6.1423 shares

I'll leave the $100 cash in the sidelines and wait for more opportunities to get in the stock market.

Update: I've decided the use the $100 to get as much XLNX as possible.

XLNX = $100 - 44 fee = $96/$36.67 as of 04/27/12 9:38am = 2.6179 shares

Aside from the upcoming dividend payout, something tells me that XLNX will be key yo the increase of data use by smartphone users.  Especially the 4G LTE group...  perhaps, a new 4G phone from a Cupertino company?

The Automatic Investment Plan will execute on May 1, 2012.

Let us wait and see.

Oil Prices Go Up... so I getting more ETP

There's a labor strike in Nigeria which would threaten oil supplies in the near future.  I do not have positions in the oil but I have ETP in my energy sector play.  I'm also counting on an increase of natural gas usage as the winter progresses.  Therefore, here's my plan:

Along with next Tuesday's Automatic Investment Plan,  I'm investing an additional $120.00 in ETP.  After the $4  fee, I'll probably end up with 2.4462 shares (at $47.42 as of 9:03 am 01/12/12).  This would bump up my Oil and Energy position and along with my Consumer Goods plays (KFT and MO), would balance out my asset allocation.

The DOW and the Market are ticking downward since the rally earlier this week.  Profit taking as expected.  This is good since I'll be getting my purchases on the pullback.

Actual Shares Bought, ETP updates and Portfolio Recap

So my Automatic Investment Plan from a few days ago kicked in.  Unfortunately, LULU and ETP went up a little bit so my "fraction" shares purchase was a wee bit smaller.  No big deal.

Here's what my $280 was able to buy:
Fees: $8 ($4 per stock transaction)
LULU = 2.5689 shares @ $52.94
ETP    = 3.0418 shares @ $44.71

Portfolio Recap (as of 10/26/11 @10:17 am PST):
AAPL = 2.1473 shares = $848.12 (+$98.12/0.13%)
ETP    = 4.0809 shares = $187.72 (-$16.17/-0.18%)
GLD   = 1.0349 shares = $173.85 (+$23.85/0.16%)
LULU = 7.3301 shares = $377.87 (-$1.08/-0.00%)
WM    = 2.0556 shares = $70.12   (-$11.25/-0.14%)
XLNX = 6.2161 shares = $196.12 (-$32.17/-0.14%)

Total = $1,853.79 (+$61.29/3.42%)

Not bad...  my fund is up 3.42% (from March 22, 2011 thru October 25, 2011) when the DOW Jones average is down 2.60% (from March 22, 2011 thru October 25, 2011) and the S&P 500 Index is down 5.00% (from March 22, 2011 thru October 25, 2011).  I actually outperformed these two indexes.  Does that mean I'm a genius?  No.  Perhaps I'm just lucky or perhaps I'm just not exposed to more volatile positions like the financial, industrial, etc sectors.   Besides, AAPL shored up my fund and is my largest position dollars wise.  Also, I picked 3 positions that paid dividends and that helped with my yield.  Also, my loses aren't so bad and it was mainly because of the fees I incurred during my early stock purchases... lesson learned.

ETP Update -  I was watching my daily Mad Money with Jim Cramer podcast and he had the CEO of ETP as a guest.  Cramer liked ETP except for the LPG business side of the company.  We found out from the CEO that ETP is planning to sell off the LPG side of the business and they already have a buyer.  He also said that they would focus more on the transport and storage of natural gas which can be lucrative for the company especially if and when the US decides to use more natural gas instead of oil.  He also does not believe that the US would be exporting the excess natural gas but the company is also hedged for the possibility.  Cramer reiterated his opinion for ETP and actually gave his blessing especially because his only negative is going away (LPG business).  Personally, I bought more shares of ETP prior to this on the thesis of the future use of natural gas during the winter months and that big juicy dividend and yield.

Next moves - I still have to put in $100 each month in my Sharebuilder Account to get that bonus (I forgot if it's $50 or $1000) and I think I found an extra $280 from my monthly take home pay so I can probably allocate some of that into my portfolio.

As you can see above, I'm a little light on my GLD and WM positions.  WM pays a dividend and GLD is a great hedge for inflation and worse-case scenario situations.  I would also like to have more AAPL so I might try to sneak in a huge influx of cash so I can get 2-3 more shares of my beloved Apple.  But for next month, definitely  I'll get some more GLD, WM and ETP.  Perhaps, I can buy shares of AAPL is fractions of a share at a time.. but we'll see.

Third Stock Pick

Today, I got in Energy Transfer Partners, L.P. (ETP) at $52.14 (even though my LO is $52.15 - I must have typed a "4" instead of a "5".. lucky for me).

I got charged the standard $9.95 commission for the trade. So total transaction is $62.09

I first heard about ETP from Jim Cramer's Mad Money. What struck me with the stock is the dividend yield of 6.70% which considered high.  this made me think if the stock is an accidental high yielder... maybe so.  So After I waited the standard two day grace period (to avoid the "Cramer Bump"), I Put in my LO and got in my position.

I got the stock due to high dividend yield and as my Natural Gas play.  Due to the Nuclear disaster in Japan and the Middle East Tensions,  I predict that Oil and Natural Gas will spike in prices as we lead in to the Spring and Summer months (Lots of people would be driving). As Cramer repeatedly mentioned in his show, Natural Gas is a more practical bridge fuel for our cars and energy use than solar and wind energy.  Also, the USA has a surplus or Natural Gas that we may EXPORT some to other countries.

Also, ETP makes their money thru Natural Gas Midstream, intrastate transport and storage in the US plus they also have a network of retail Propane Gas stores.  ETP's debt mostly consists of investments in pipelines and discovering new sources of Natural Gas.  As mentioned in their 10k report, ETP knows that failure to invest in pipelines and new sources of Natural Gas will severely damage their gross margins and market growth.  Therefore, even though I do not like companies with a lot of debt outstanding, the reasons ETP gave sounds reasonable and is necessary to further their growth and competitive edge.

However, I will keep a watchful eye on this stock.  My goal is to own 10 shares of ETP by 12/31/11. I would sell if the following happens: 1) Dividend is cut/ Eliminated 2) Government regulations hinder or hurt the adaptation of Natural Gas as a viable alternative source of energy.

Exit strategy is my standard 10% gain or the stock reaching a high of $60.